Monday, October 20, 2014

Digitalization brings both abundance of business
opportunities and the flood of high potential risks, how to manage them effectively become
more critical than ever. First and foremost, how do you overcome risk
assessment challenges?

1) Sponsorship from business leaders, who would
encourage their teams to participate with positive commitment.It is very difficult to convince
senior management to act upon preventative measures, unless you are able to put
it into monetary terms.

2) Attitude and experience of the risk manager to ask
question; and do the pre-work before risk assessment in the correct manner. Team
and leadership "buy-in" is extremely important for any risk strategy
to get off the ground and to maintain effectiveness and efficiency

3) Developing forward looking assessment framework, that
is able to identify risks and report to the board in a manner that brings about
the right conversation about risk management among the board members.

4) Making the exercise comprehensive yet simple at the
same time; to ensure it is not taken as a burden by employees responsible for it
and truly adds value to the organization. You also have to be prepared for a
management / employee commitment and understanding which may include
overlapping risk related responsibilities or communication with the entire
senior management team for organizational critical elements, rather than just
the leader responsible for the asset, event, or process.

5) Developing an effective risk culture within the organization, which would lead to effective implementation and embedding of risk initiatives
at lowest levels. The effective risk culture in the organization is the primary
key to resolving and preventing many of the challenges.

6) Integrating risk into resource prioritization and
planning processes. The risk process helps them prioritize the activities they
are committed to resourcing in addition to serving as a cross check for
anything that they may have missed or are doubling up on.

7) Avoid pitfalls: ENTERPRISE-WIDE RISK MANAGEMENT OR ENTERPRISE-WIDE
LIST MANAGEMENT. Enterprise wide risk management intends to manage enterprise risk systematically and effectively; but enterprise wide list management is the
scenario in most organization they list the risk but do nothing about it and
they say they have implemented ERM without regular review of changes in
profiles or be able to capture incidents that changes rankings.

8) Other enablers to meaningful risk information
include appropriate aggregation processes for the executive as well as an
appropriately calibrated risk scheme that is gaming-proof.

Assessing and managing risk effectively is an important
step in improving organizational maturity and achieve high-performance business result, most of
businesses are not perfect but they are inching their way to full agility.